Umbrella Company FAQ

An umbrella company is in short a payroll and employment service for contractors and temporary workers. Using an umbrella company gives you many of the benefits of being a limited company without the extra responsibilities and admin associated with a limited company. It also means that contractors can be legally tax efficient and avoid all the implications of IR35 and MSC legislation as you are an employee. So it is perfect for short term contractors or those who do not wish to set up their own company. Working in conjunction with the HM Revenue and Customs, providers of umbrella services can allow contractors to genuinely offset business expenses against tax and allow them to save money. This is also a benefit you would not get if you were payrolled directly through your agency. You become a flexible employee of the umbrella company. They would become responsible for calculating the tax that you need to pay and for paying it across to HMRC for you.

You are an employee of Nasa Umbrella Ltd. This means for visa applications or tenancy/mortgage references you will need to contact us.

Not only does using an umbrella company help you as a contractor to save money but it also removes the issues of employment and insurances away from your agency. This is mainly because you may be able to get tax relief on your costs which reduces the amount of tax and NI you pay. As a result, using an umbrella is becoming the method of choice for most contractors.

As a contractor you will suffer PAYE, Employees and Employers National Insurance. Don't worry though as the rate you are paid by your agency includes an uplift for this extra Employers National Insurance so you don't lose out. You also get the benefit of expenses tax relief so you will actually keep more of your income.

Income from £0-£8,105 is exempt. 20% is suffered in income from £8,105 - £42,475. 40% is suffered on income from £42,475 - £150,000 with 50% being suffered on income in excess of £150,000.

Employees NI rates are as follows: income between £0-£7,605 is exempt; 12% is charged on income between £7,605-£42,475 with income over £42,475 suffering 2% Employees NI.

Employers NI is set at 13.8%. This is suffered on all income over the £7,488 secondary threshold.

All independent and umbrella company contractors must pay Employers NI. The Employers NI is deducted from your gross income after your weekly service fee and expenses have been deducted. The rate you are paid by your agency is higher than it would be if they payrolled you directly to cover this deduction so you aren't losing out.

As we pay you with a same day faster payment, your money will clear into your account by the close of business the same day. Sometimes the funds will clear earlier than this depending on who you bank with. The day on which you are paid will depend upon which agency you work through, but we will advise you of their processes when you sign up to our service. If we don't know - we'll find out!

Yes. By law you must receive a payslip showing your net pay and any deductions made as well as your 'year to date earnings'. Your payslip will be sent electronically to the email address that you supply on your registration form when we have authorised your payment. As such, receipt of your payslip shows your payment has left Nasa Umbrella and will be with you in 2 hours or less.

We will contact your agency and arrange for your contracts to be sent to us once you have registered with the service. We will be able to process them once we you have accepted your employment contract (and as long as we have your registration form, copy of your passport and proof of address) and return them to your agency so you can start invoicing.

You will be emailed an Overarching Contract of Employment between you and Nasa Umbrella Ltd. You will need to accept these electronically so we can process your agency contract as above. You will also receive a work record which outlines the particulars of your assignment as shown in your agency contract documentation.

As an employee of Nasa Umbrella you will stand to receive all statutory allowances if applicable. There are certain criteria that must be met in order to qualify and these are outlined in our Employee Handbook.

By law you must receive Holiday Pay. As such we will allocate the correct portion of your pay as Holiday Pay and pay this across to you each time you are paid. This is known as 'rolled up' holiday pay. Alternatively we can hold back your accrued holiday pay in a 'fund' for you to take when you take time off work, although this will be treated as a normal payroll process and incur a normal admin charge (standard weekly fee of £9.99).

No - there are no joining or leaving fees. You will only pay your weekly administration fee of £9.99 when you are using the service. All service fees are subject to full tax relief which is processed automatically.

No if you are not in contract you will not have to pay Nasa Umbrella anything. The weekly fee is only charged when you are working so this will just pick up again once you start a new contract.

The weekly charge for Professional Indemnity insurance is £1.00, upon which you will get tax relief. Professional Indemnity insurance is a requirement for most agencies/clients as it covers you for damages/defective works. It is very expensive and because not everyone requires it, we only charge those who do need it rather than hiking up the weekly charge for everyone.